Control Critical For Women

YOUR MONEY

Financial Experts: Get Involved And Act As If You Will Live Alone

LEXINGTON, KY. — Susan Pyles never thought about her household finances or retirement until divorce forced her to do so.

Now Pyles knows better. Women must know how to take care of themselves financially, she said.

''My advice to women is to be involved,'' Pyles said. ''You and your husband (must) plan the finances together no matter how boring you may find it or how unsure you are. Learn. Your financial security and your family's financial security depend on it.''

With half of all marriages ending in divorce, other women postponing nuptials and many widows being 55 or younger, financial experts say women have no choice but to get their financial houses in order.

''The thing women need to take into consideration is that between the divorce rate and the death rate, they need to know what is going on with their finances,'' said Celia Hayhoe, a University of Kentucky professor of family studies and a certified financial planner.

Women would do best to plan their financial future as if they will be alone, said Pyles, an agent with New York Life.

Pyles, 51, says she wishes she had had experience budgeting, saving and investing before her 1994 divorce.

If her story doesn't persuade you to start saving and investing money, these statistics might: Eighty percent to 90 percent of American women at some time will be solely responsible for their finances; 50 percent of married women get divorced; and nationally, there are 1.1 million widows younger than 55.

Gone are the days when money wasn't fit conversation for ladies, says Orlando resident Marsha Bertrand in her book A Woman's Guide to Savvy Investing, released in November by AMACOM ($24.95).

''The subject of money is necessary for women. We must understand money, investing, credit cards, mortgages and retirement systems in order to prepare for our financial futures,'' Bertrand says. ''Money is definitely a woman's topic.''

It's even more critical that women are financially grounded when various inequities are considered, Bertrand says.

For one, women earn less, making 72 cents to every $1 men are paid.

Women also have shorter careers, spending 14.7 percent of their working years raising children or taking care of sick relatives. That means women have less time to get raises or contribute to retirement plans. By comparison, men miss out on 1.6 percent of their professional years.

Less than half - 45 percent - of women 25 to 64 participate in a pension plan.

The first task to getting your financial life together is to figure out where your money goes and develop a budget based on your expenses. To do this, go through your checkbook and order back-statements from your credit-card companies, which usually won't charge for the past three to six months. To find out how your cash is spent, keep a log for a month.

The next goal is to pay off debt, especially credit-card balances and car loans.

Now it's time to start saving money. Experts advise saving an amount equal to three to six months of your salary, in case of emergency. Just remember you don't have to poke this money into a savings account, which typically will earn a measly 3 percent interest. Money-market accounts allow just as quick access to the money but at a higher rate of return. You can write checks on money-market accounts, and right now they offer up to 5.28 percent interest.

Don't forget to pay yourself. Under the savings rule you should save at least 10 percent of your net salary.

Finally, you're ready to start investing.

To figure out how much money you ought to have invested in equities, simply subtract your age from 100, said Hayhoe of the University of Kentucky. For example, a 30-year-old should have 70 percent of her money in stocks.

Most small investors can't afford and don't have time to research individual stocks. So, they opt for mutual funds, which pool money from thousands of people and are run by a professional fund manager.

If your employer offers a 401(k) plan and you're not taking advantage of it, start doing so right now. Employers will match a portion of what you put in. If your employer matches 50 cents on the dollar, you're making a 50 percent guaranteed rate of return. It's basically free money. Also, remember your 401(k) contributions are exempt from federal taxes.

Married or not, everyone needs to come up with a retirement plan - to know how much to save and invest for it, Pyles said. Plan for the worst-case scenario, too.

Don't wait until you're reeling from divorce or the death of a spouse to get your affairs in order.